Transcript

Good evening. Welcome to this meeting of the Audit and Government's Committee on Tuesday the 4th of June 2024. My name is Councillor Julian Teasy and I will be chairing this meeting. This meeting is being held in person and via zoom and streamed live to the public on YouTube. I remind all attendees that participation in the meeting indicates consent to the audio and video being streamed live and acknowledgement that after the meeting it will continue to be available into the public domain. First it would be useful if all panel members and officers could introduce themselves so that the public are aware of who is in this meeting and the role that they are undertaking in the meeting. So I will start with myself I'm Councillor Julian Teasy and I am chairing this meeting. Councillor Mark Wilson vice-chair. Steve Magli the council's insurance and risk manager. Elizabeth Griffiths executive director of resources. Julian McGowan senior finance business partner. Lisa Fryer swap internal audit services head of internal audit. Councillor Julian Sharp. Councillor Gary Reeves. Mark Bealy principal democratic services officer. Thank you I request that meeting participants do not speak until unless specifically invited to do so. Once I've invited you to speak before you do so please state your name and the capacity in which you're speaking is appropriate. I will also ask officers to speak at appropriate times. If any individual attempts to disrupt the meeting I am able to use my powers of the Constitution to adjourn the meeting or have the individual removed. So we will now start on the agenda items so item one do we have any apologies for absence. Yes chair received two apologies one from Councillor Bond and we've got Councillor Reeves attending the committee tonight as a substitute and also from Councillor Knowles. Thank you do we have any declarations of interest against any of the items in the in the meeting many of you are from any of the council's involved. No I'm seeing that I'm seeing no. Okay item three to consider the minutes of the meeting held on the 22nd of February 2024. Are there any comments or corrections for those meeting for those minutes. Can we approve and agree these as a fair representation of the meeting? Councillors yeah okay fine okay agree okay so I'll just sign these here. Right okay so to move on to the substantial items on the agenda so item four the internal audit progress report for Q4 for 2023-24 so I just wonder if yes Lisa Fryer from SWOT can introduce this item thank you. Yes tonight we've got our regular progress report and it's for quarter four and so the last one of the year as a reminder the progress report is to highlight significant outcomes from audits to update the committee on progress made against the plan and to update the committee on changes made to the plan a summary is provided for you on page 19 as we are at the end of the year and looking to finalize all of our work there is a higher number of audits that has been finalized this time the limited assurance reviews will be considered later in the report there was also a an advisory report that was concluded on in the quarter relating to the high corporate risk contract management again we'll look at that in more detail as we move into the report all reviews in the 23-24 plan are now at least at reporting stage so the plan is substantially complete we are pleased to be able to report that the section 106 corporate risk that was reported in 2023 has now been removed we've carried out a follow-up during the period and I say very pleased to report that all agreed actions have been implemented as you know SWOT follows a risk-based approach and if you move to page 22 you will see how we've mapped the strategic risks against the audits in the plan and they've been a couple of deferrals in the quarter but you will still see that we have covered the majority of the strategic risks within this year's plan then page 23 that gives you a summary of where we are with our follow-up work so when we report a limited assurance report we then will schedule a follow-up review so that we can evidence that those agreed actions have been implemented we became your auditors in April 22 and since that time there has been quite a number of limited assurance reviews and so it is a fairly lengthy list there now some of the follow-ups have been deferred to 24/25 to give more time for those actions to be implemented where we have carried out follow-up work I think is if we could sort of look at it is in general terms I would report that has been progress made but not always have all of the recommendations been implemented in full. Then page 24 gives you a bit more information on plan progress we did see a slowing down of delivery particularly in quarter four as a lot of staff members were focusing on pulling together the financial plan things did pick up in quarter four and as I said now that we have substantially delivered the plan and with all remaining reports now completed. There has been some deferrals but if I compare the number of projects delivered this year and last year in overall terms the number delivered is basically the same. In terms of our limited assurance audits more information is provided on the four that were finalized in the period in Appendix B so that starts on page 26 with maximizing parking income. So I said we did actually just focus really on maximizing income and we have found areas of good practice but also some weaknesses as we've got a number of partners we were able to do some benchmarking work to compare the approach in the borough with our partners and that did identify some differences to us. It did identify that there was more free parking in the borough where charges have been made in some of our other partners. We also found that there wasn't agreed process for fees for alternative use of the car parks and there wasn't a process for the waiving of permit fees which does happen. We did some financial reconciliation work as well and did find some issues there too. Then the next one is disabled facilities grant process. This was previously managed by a contractor and when we did the audit had been brought back in-house and we were able to report that there was some improvement in processes as a result of that including a new policy and a supporting checklist. There were however three significant findings from our work. We did find that purchase orders were being raised in advance of works. In addition high-cost legacy cases so that's previous to the work being brought in-house they're going to be required to be funded from capital budgets going forwards and at the time of the audit senior management responsible for budgets weren't completely aware of that. We also found that there wasn't an approved contractor list and that the contractor selection was being based on staff knowledge. Tree safety is the third one. There is a significant backlog in proactive tree inspections. The budget has only been able to support reactive inspections in 23/24. Also the register of tree stock we find to be out of date and the tree strategy being used was dated back to 2010. The strategy needs to be able to deliver what is reasonably practical in terms of tree safety so recommended a risk-based approach would be better. We also find the conducting recording of tree inspections by other services wasn't well coordinated. Then finally the remaining limited choice is information governance where we find there was a lack of corporate oversight or ownership to monitor compliance with the requirement of the local government transparency code. There wasn't a timetable set for publication of required information. Several key areas were either not published or had several key requirements of information missing. Then I'll just summarize the advisory review that was completed on the contract register. So in 22/23 we reported a high corporate risk in relation to contract management. That audit identified weaknesses in the contract register so that's why we included that in this year's internal audit plan. Due to a lack of capacity in the procurement team we were unable to carry out a full audit that's why this is an advisory review without an opinion. So it was more limited in scope but what we did find is that the contract register was outdated and complete. 95% of recorded contracts had one or more key fields missing included recorded value in the majority of cases. We did some financial analysis and this identified that the council paid 50,000 pounds or more to 169 suppliers which weren't included on the register so that suggests some recorded contracts. There are also no contract recorded instructions for contracts below 50,000 pounds so it's like the officers wouldn't be aware that these need to be recorded. The next section is on the follow-up audits that we've carried out over the period so I've already mentioned section 106 agreements so I said already the follow-up identified that all findings were implemented in full and so no longer reporting a high corporate risk in that area. Then risk management the next one as you can see there from the table we're able to report that good progress has been made but there are still several areas that still require improvement and revised timeframes for this have been agreed at November 24. Key to this is broader ownership and accountability for the review and updated strategic risks. Then records management all actions were found to be started and in progress but not completed. Unfortunately following the audit the information governance manager left the council so that has slowed the implementation of the recommendations. New dates have been agreed and we will continue to monitor those. And finally adults financial assessments all actions have been completed where possible so that's good news there's just one remaining in progress and that depends on the implementation of the new adult casework system mosaic so again we will continue to monitor that one through to completion. There's full listing of audits in the plan and their progress at appendix E so page 35 of this pack. This report report focuses on where there are key risk areas but you will see in appendix E that as well as the four limited assurances there have been three reasonable assurance opinion reports finalized in the period two. All final reports are available on the members team folder in Teams. Thank you very much I will open up to questions. Thank you Lisa very much and very comprehensive and very clear I thought summary of what we of what audits have been done where we are at this moment. Can I open it up to any questions for the officers or Lisa. Councillor Leeds. Thank you very much I was very interested to look at the and see obviously the contract management piece being a high corporate risk I mean that's something that we've actually identified on a number of other meetings as well and we've brought up continuously and to actually then come across this is an effectively not a fully audited report for that section is concerning and particularly hearing about 169 you know the potential payments of over 50,000 if we equate that and calculate that how much that exposure is to actually not having contracts on the register that's it that is a large amount of money so obviously with that concern and it being a high corporate risk when I looked at the audit follow-up status on the action plan so I think this is on according well when I'm looking at page 13 it says that we have contract management we have six priority one actions the latest timescale is the 31st of December this year and it's deferred as well I have quite a concern why we're waiting so long and what the driver is for that is it because you're waiting for resource in the procurement department and that's why you have to wait that long and is that definitely happening if we got an actual plan for that resource to be taken on Thank You chair and I'm sure Lisa can answer as well but I would say you're right it's about resource in the procurement team so we've recognized this as an issue and we have addressed it so there was an extra two posts put in the budget this year and we've got some interim staff and at the moment who are creating capacity and the head of procurement is actually out to recruitment at the moment so in discussion on that subject that there was no point in going back right now and coming to the same conclusion what we needed to do was to actually say let's get the staff in post let's get the processes reviewed let's get all of that in place and then absolutely we need to internal audit to come along and say have we now got it right but because of that cycle that we're going through for recruitment there was no point in redoing the order until we actually had those people in post but it absolutely is being addressed and the other thing I would say is about contract management and one of the things that we're recognizing is that it doesn't just sit in procurement it's got to be all through the business so that's why part of the the plan in procurement is to be doing more liaising and to be doing more training and to make sure that staff are up to speed with the right processes and hopefully when we go back and revisit with another order that will be reflected. Thanks so much for the response and it actually brings me to another point about the fact that obviously saying that I have the belief as well that contract management doesn't just lie with the procurement but the explanation of why they couldn't do a further or a more intensive audit was because of the lack of procurement resource was there not an opportunity that you could have actually gone further to those people that you would consider in each department to have oversight of those contracts to potentially get a further review done in the original audit that you performed so that would be a question I think for Lisa why that wasn't considered and also it would be good to get an understanding of the confidence in being able to fill these posts because it's obviously a key to us actually unlocking the ability for us to audit this and it's an extremely high risk it's an exposure to our financial expenditure which we know is our highest risk factor right now so just want to get a sense of the confidence and being able to fill those posts early enough so that they can start work quickly enough so that the audit is meaningful when they come back towards the end of this year so two questions one for each I think thank you I can answer the first part of that and yes so it was a more restrictive review and we decided to keep it high level but my next agenda item is the internal audit plan for 24/25 and we're doing exactly what you're saying because we've been looking at the contract management arrangements within the place directorate so we will be looking at more detail within that service yes there's also the pupil director as well because they also have contracts as well it's not just place as well yeah indeed but it is limited what we can do in any one year so next year we've selected place yeah it would be nice to look at people I agree adults and children which is where most of our experience we got 77 so cancel read sorry is this a further question is that that 77% of our budget is spent in that area yeah so I was just concerned why we're why we're deferring that another year and not finding is that is that a question for lease or is that the question that would be a question for Lisa because why they've made a decision not to do include people into okay the question is that's the question some of the very large contracts are within place and the highway's contracts ground maintenance waste really significant contracts to the council so that's why we selected them but I do agree there are contracts across the authority and that they would be valid valid areas of orbit also just on contract management oh yeah sorry you're about to you're ahead of me yes I completely agree with with what Lisa's said and I think because the other thing is about auditing it's always on a sample so you always have to choose your sample and you know if that comes back and says that there are issues then you go back and you check more but you've always got to select a sample in terms of the recruitment question it's a little bit early to see how successful it's going to be because we're sort of at the moment but what I would say is that the interns have come in Lynn Hitchenson who's our head of procurement is very happy with the interns that have come in so the fact that there are good interns on the market is usually kind of a bit reassuring that when she goes out for the permanent staff and she's going to have success the other thing is that she's looking at the well she has looked at the structure of the team and sort of broken it down between what's the procurement specialism and what's more admin resource so that she can make sure that she's not kind of going out for the impossible because it cuts down the number of sort of expertise to get because she can bring in lower level people have them do admin but train them up through the process as well she's got quite a number of people when we talk about restrictive resource basically there was Lynn and another one and a half people last year and one of those people we lost early in the year and that post was vacant for most of the year so there was Lynn in this of half person and so now she's got two additional posts plus replacing the one so she's got some interim support and she's out for three vacancies at the moment counselor shop thank you thank you chair I'm I'm on the contract management side of things as well I wanted to ask questions about that I'm just concerned that with the apparent lack of of control where to what extent can we be sure that we complying with all the necessary government regulations on public sector procurement we've just had a limited assurance audit on it so we know that it's an area that we need to look at I would say that we've done quite a lot of work recently on procurement so we've we've put together a pipeline of all of the contracts that are due for renewal the procurement team are looking at those with the support of the interims that they've got in and making their plans between what they have to get involved in what staff can do for self-service there's training being rolled out to the assistant director level but where they can access process documentation and and sort of structure that enables them to do it compliantly themselves so a lot of work has been done recently on procurement to make sure that we do get it compliant okay and out of out of all of the work that you've done in the last 12 months Lee so what which which of the audits are you most concerned about in terms of the results that you found I think at the moment there seem to be a number of gaps which need to be plugged and you know I was when when when we brought swap in to the council I thought this is a really good move and each year there seems to have been work done where things have improved over time but only slowly so I think you know I think you've been now in place for is it three years now or four yeah so we should be getting to a stage where virtually all of the low-hanging fruit if you like has been picked and we've we've done some digging and overturned some of some of the things that aren't so we we thought were there but aren't and we should be getting to the difficult stuff now I guess in terms of your audit cycle and hopefully things will start to start to improve in all sorts of other places as well I can't entirely comment because I wasn't here but I don't think that swap has been targeted at the low-hanging fruit I think that we do go for things that we're concerned about because that's the benefit of internal audit that you're looking at something certainly as a 151 I look at something I've got a concern I want to either task by fraud squad to have a look at it if I think it's in that direction or internal audit to have a look at it and then sort of take the results I think what we're really hoping to have stepped up on this year with the introduction of the performance and resources board is to have that forum where the concerns that are raised in these audits can then be regularly reviewed so that we don't fall behind on implementing the actions from the outcomes of the audits because I think what I can see here is that we've had audits concerns have been raised but I think we've maybe been missing that link where we're making sure that the actions from all of the audits and not just some of the audits are implemented so I think that's something we've really stepped up on this year link to carry carry things forward and close it close the gaps if you like right thanks just just before we move away from contract management yes I see I see but I just have just a couple of questions on that myself but one for Lisa one for Elizabeth the one for Lisa is hopefully a simple well it might not be simple but like you decide we have this as the contract management order as as an advisory order term because obviously and the reasons are there I presume I know the answer to this but what level of assurance if any is in such an advisory audit or is it literally just that it is just advisory and before you answer that I'll ask the question to my question to Elizabeth is regarding the actions or the so the conclusions from these or from this audit there are a couple of certainly the ones that are noted red seem to be very clear do you have any response in terms of what we you know given budget constraints but obviously given the risk and the level of risk what what have we have we planned actions or agreed any management actions in regard to these if you ask first so what level of assurance if any and it may be or is it what it says on the team advisory only it was intended to be an assurance piece of work but as we didn't have any availability or resource from the procurement team it restricted the work that we could carry out so we did our best using information that's published doing financial analysis by using information finance system to do the work that we could if we'd done the full audit we would have covered more and because that scope is limited that's why we thought it best to call that an advisory review and not give an assurance level but given the findings that I've reported I think it's highly likely that it would be limited if we were to this is the second audit that we've done around contract management so we did a contract management it was actually I think virtually the first audit that we did in in 22 and that was a request for senior management and actually counselors to do that so we looked at the contract management sort of corporate framework and the key conclusion was well there wasn't one so you know that our piece of the contract register work is to get a strand from that original piece of work thank you Lisa I think that's very clear so Elizabeth just the other question was about so okay obviously we have this as an advisory piece of work but there have been conclusions advisory conclusions and do we have we gone to the next stage and do we have responses to those or actions arising thank you chair so this again I think is it's mostly about process and it doesn't just sit within the procurement team so what I find so far is that if you need to look at a contract and it's a contract that went through the procurement team and the record keeping is good once it starts to become a bit more disconnected and it wasn't something that went through procurement that's where I think sometimes we fall down because then staff may or may not have logged that contract in the way that they're supposed to so that's what we've started addressing so as I said we've been rolling out training to to CLT to the AD level so Lynn Hitchens of the procurement managers done that so that sort of addresses I know that's the amber one but that was about the contract recording instructions and making sure that officers can actually do it self-service in a compliant way and the second red item that's about people that doesn't mean that those contracts weren't compliant or that they didn't go through proper process it means that they've been put in place but haven't actually been given to procurement to put on the contract register so I think this is more about process so yes we are addressing it cancel rate thank you very much obviously with this being quite a high risk level there was two points I wanted to cover one is that this really really highlights to me that this is an extremely important item that should be on the work program for the corporate O&S scrutiny panel and contract management is something that I've brought up previously to actually bring before corporate O&S so I think this is just really you know highlight heightened that even further that we need to do that sooner rather than later based on this has the basis of this report fed into a repositioning within the risk scatter graph or is it already in a position that's accounted for this in its current position that has been put because you've published that and we've seen it but has that taken into account that very high level of risk that's been associated with with this audit and outcome in a nutshell what we need something to be covered when we get through this management paper but essentially what I've done over the last few weeks is meet face-to-face with all the executive directors to take assurance for the impact and likelihood scores of their risks is accurately reflected on these kind of graph and so the insurance in this case from Elizabeth was that yes this should be scored as it is on the scatter graph and we continue to debate bits around it but it seems to be a reasonable position to take the most likely risk assessment is where it's placed there at the moment which is yeah so it's a low likelihood relative to our scoring system but a very high impact at the moment because that amount the council hasn't suffered particularly from contract problems I am aware of some of them existing but that's the thinking behind placing it where it is on the spread of our counsel Wilson Thank You chair just looking at the the various limited assurance audit reports in here there almost seems to be a pattern that we're kind of picking up previous deficiencies in process and sort of operational procedures and I guess one one example the easiest example almost is the tree safety reports where there's said you've reported the backlog due to the annual budget I just just wonder this is possibly more directed to officers what what is that the council's approach to kind of getting things back on track and maybe use the trees as an example or any of the others the disabled facilities grant it feels like there's a lot of catch-up work to do what is the what's the kind of the approach to that given that there isn't a huge amount of room in the annual budget yes thank you Joe so on the trees that's something that we absolutely recognized and in this year's budget and there's an apportionment of money from so which can actually be used for green infrastructure and that's being used to address the backlog in the trees and so that's being brought up to speed as quickly as they possibly can okay I don't see any hands so I have a couple of questions myself hopefully a very simple one first of all on the tree audit as well should we read anything so I notice on the assurance opinion there's an arrow and the arrow seems to be furthest to the left on this one rather than sort of in the middle is that just a graphic or is you would have it would suggest that this was the tree one was the one that is the most risky but actually your answer earlier suggested perhaps it wasn't but should we read anything into that question releases yes the position of the hour does demonstrate that that's a low limited insurance as we find that was no pre-op proactive inspections being carried out thank you that's most accurate and another question I have a couple of questions on the maximizing parking income actually and possibly possibly more for Elizabeth actually so amongst the conclusions we had we said the council currently provides free parking where charges could be made including for blue badge holders now I presume that that's something that is potentially a political decision and one that is perhaps common amongst other councils I guess that that's something that is there'll be a number of people okay I'm getting nods here can I just have a question this possibly is the least are actually the second thing talks about alternative use can you just sort of explain what we mean by alternative use and in terms of an agreed in terms of agreeing the charges for alternative use you just explain what that means so alternative use is using it for other things besides yeah council Wilson thank you chair and just one follow-up actually on that in terms of the recommendation to sort of charge for example for maidenhead car parts on a Sunday I wonder how commercial day is because my understanding is that the reason that's free is to encourage people to visit maidenhead on Sunday when you know they need to be visitors so I'm kind of questioning the value of that recommendation it feels like that's not very commercially aware I can see you have to take other factors into consideration as well I suppose the focus this was on maximizing car parking income and you know work that we did was to look across our partnership to see what others were doing so others were charging on Sunday and charging blue badge holders so I suppose we need to look up whether they also were close to shopping centres and yeah more detail demands to make it a fair comparison so I don't have that information had to know if that if that detail was was gone into in this order and I apologize apologies but I have one further question on that same audit which I forgot to ask before and this may be a question for Elizabeth actually but I note that there's a limitation to scope of this audit namely that it did not cover PCN or penalty charge notices and other forms of enforcement now I know that that's a different kettle of fish as it were but anecdotally certainly I know certainly talking to a number of residents in the center of Windsor but there is almost it seems sort of a I wouldn't call it a gentleman's agreement but there's there's a lot of sort of parking that happens in the evening in in the central Windsor and no doubt there are other places and we know that there are no enforcement or little no enforcement that happens there I appreciate that there are rules around where that money goes and how much you can charge and how you can do it but is there a reason for that exclusion and is there any is there any sort of plan to do that in the future was it considered not a priority was again I think to make efficient use of the audits we have to sample check and decide what the scope of them is so I don't think that was excluded for any particular reason I'm not aware of any gentleman's agreement where we're not penalizing people for parking incorrectly I can't imagine that's a thing I would imagine that it's more about it costs money to provide enforcement for parking so you target areas where you're likely to get the most revenue and don't target it at times or areas where it's not going to be worth chasing up thank you very much it's going on again it's the parking income and maximizing the parking income and we were talking about the free parking for blue badge holders and the free parking on it made me on Sunday and picking up from what counselor Wilson was saying within the when you look at the audit objective I listen to what you said is a reply and when I looked at you look at the audit objective they say to maximize the income opportunities are utilizing the parking spaces to generate revenue but then it then also says while supporting its residents and businesses and aligning with that and that kind of really talks to exactly what council Wilson put up about supporting the businesses and therefore the free parking and made in head on Sunday has a rash clear rationale in supporting the businesses and the blue badge holders and the free parking is supporting its residents you know we have a lot of issues with for example accessibility into the town center and the lack of disabled parking and actually that side of it is it wouldn't that shouldn't have been considered in the order as maybe not being referenced as a key conclusion as a you know yellow or limiting us because it's not it's still supporting our audit objective thank you the audit was to look at maximizing parking income so while I agree that we as a council have to look wider and think about the commercial impact on the high street because that's our concern but the scope of the audit that's what we're asked to look at was maximizing parking income so they benchmarked against neighboring authorities and pointed out areas where other people raise more parking income if we choose not to then that's a decision that the council makes that's often influenced by political agendas and that's something we're perfectly at liberty to do but the scope of the audit was maximizing in particular parking income is it so is it a return question or a return comment if it's return because yes sorry council rate as an answer fully because I clearly pointed out and you've narrowed the audit objective the audit objective I read out in full and you've narrowed it again to say it was only about maximizing income it isn't it says while supporting rates residents and businesses and my question was why was the audit not considering those items to be supporting the residents and the businesses because the audit scope and objective quite clearly set that out as not just maximizing income but whilst also supporting business and residents and we can we can't leave that off I'm sorry but that's I think we need to answer the question I asked these focus towards maximizing car parking income you have made a valid point there are other factors and there is also a political decision I do so I do take that on board but I don't have today is the detail of what built up those findings I don't know if they looked at usage of car parks with the other partners I'm not really sure so I don't so it could be that that was I should say you've read out the objective it could be that in the testing that we carried out you know that was part of the works I don't have that information to have to be able to answer but so I do take the point that it is more complicated you'd need facts and figures wouldn't you to show if you charge on Sunday and if you don't to know that it makes a difference just to just to bookends that point I think we asked our auditors to we we give them a scope we give them something to do and they and they give us an opinion now if there are conclusions and we sort of take a different political opinion that's fine and you know with that's nothing wrong with the audit as it were because they've done that because we can say well it's okay we've made the decision not to fine so just I just wanted to bookend that point of a fake council person yes oh yes Thank You chair I'm just moving on to the the section 106 follow-up which is which obviously reads much better than the the 106 position was looking sort of a year or so ago I just wanted to I guess ask officers their view of the of the 106 process now because as I say that these are that is a dramatic improvement and it was a very important thing I think if I remember rightly last year we potentially identified there was some there was potentially a significant amount of funds not being collected so just one of them if can have an update on the officers view of the of the 106 management process so I'm doing a lot of work at the moment on section 106 and still we're currently part of the balance sheet reconciliation which I'm sure you all know about we're doing and yeah I think in a few weeks time we will be in a position where we'll be able to clearly report to see officers and members exactly how much section 106 is an unallocated I mean that's a key key issue you haven't had in the past on section 106 and still we know we've got a lot of money on the balance sheet but how much that has already been allocated in the current capital program how much has been allocated to generate revenue savings and therefore what is left to you know to invest so yeah so that from that that particular element of the section 106 I know quite a lot about and we'll be in a very good position in probably two to three weeks time thank you very much for that explanation that's very helpful can I ask how that might get reported back to members would that come to this committee or through the course of performance report or something those that would be very interesting to see that yeah I think that's that's something we haven't yet discussed we've been discussing to Councillor Jones about it so I think yeah that's we'll have to decide how to have that but really it should really be really integrated with the capital reporting I think because that's really what most of the money gets used for is the firm capital project so I'd imagine sort of integrating it with that sort of report and doing it the best way forward yeah I just have one sort of Sunday question just on page 27 the three reports that are draft am I right that whatever that any that the conclusions will be reported at the next meeting yes okay that's fine looking around the room and seeing no further questions thank you thank you Lisa thank you for that that report on the 23 24 which we just need to duly note that so consider it noted so thank you and can we now move on to item five on the agenda which is the 2024 25 forthcoming internal audit plan and we it's our job here to review and approve this plan we so decide so yes Lisa again if you want to introduce this very much since starts on page 47 there's an introduction for you and that provides an outline of the purpose of the internal audit plan so internal audit provides an independent opinion on the authorities risk management governance and controls best practice states that we follow a risk-based approach so that we align the internal audit plan with corporate priorities and strategic risks the aim of the internal audit plan is to provide a program of work that gives sufficient coverage to provide an opinion just draw your attention to the bottom of the page page 47 as it says as a committee you need to determine that the audit coverage contained within the proposed audit plan is sufficient and appropriate to provide independent assurance against the key risks of the organization so moving on to page 48 and our approach this provides an overview of the sources of information considered during planning the key documents are the new council plan and the strategic risk register and you can see the other factors here that were taken into consideration as well as aligning corporate priorities and strategic risks it is also important that we cover the authorities fundamental business processes and key services so that is things like financial systems and the other core services like we've talked about contract management that sort of thing so it's a risk-based approach so we need to identify those risks assess them work out which the most important got different sources of information you see on page 49 the local issues they're largely from the strategic risk register we've also got swap suggested areas of risk that's my intelligence across our partnership and also there are no national issues all of those are taken into consideration actually you've got the core areas of recommended coverage there as well page 50 gives more detail of the process follow as you can see we receive a request for senior management to significantly reduce our internal audit days in 24-25 we've agreed a 25% cut in our fees and in recognition of the seriousness of financial situation we have agreed to forego our normal 12 months notice period so this changed the plan meant it took longer to agree the program of work and so approval didn't take place in February as it usually does in putting together the plan meetings were held with department management teams in place adults and children's as well as resources and also once those meetings were held plan pulled together and discussed with the council's leadership team these meetings have been key to agree in a deliverable program of work that remains risk-based as we all know an overriding risk at the borough is financial and so it's very important we cover that and also the financial resilience themes that support balancing the budget going forward and the proposed plan is in annex a we do believe that we'll be able to provide an annual opinion with the cut but we will need to deliver the insurance work set out to give the necessary breadth that we need to help ensure the key audits will be delivered as far as possible the highest priority ones have been included in the first half of the year we do recognize that as much improvement and transformation work going on and it is important that we capture that so what we've agreed is around the halfway point that will review those plans for the second six months and make sure that that is reflective of the key risks and we'll update that plan as appropriate then finally just bring your attention to a change in relation to the internal audit Charter that's on page 52 so the purpose of the Charter is to set out the role responsibility authority of internal audit work between the borough and ourselves there's going to need to be some significant changes to the Charter because of the introduction of new global internal audit standards and that's what we're looking to base our Charter on the model Charter that's been produced by the Institute of internal auditors and that's expected to be released later this quarter and so we haven't been able to include a Charter here today that reflects that but we should be able to next time and in the meanwhile we'll continue to operate in accordance with our existing Charter thank you very much any questions and thank you Lisa thank you before we before we move to questions Elizabeth did you want to say anything at all just just almost in anticipation of questions about the about your opinion of the scope of the audit obviously there's been a reduction in the hours as you know as we've discussed in previous time but it looks like we there's a plan there's a plan so just wondered if you wanted to give any thoughts about you about your opinion on the appropriateness of this plan and then we'll go to questions as it were yes so the situation that we realized we were in was that we had quite a large number of days that we were paying for for internal audit and we were struggling to resource on the officer side of things the delivery of all of those audits and so effectively we ended up paying for a lot more audits than we were able to actually have so we've been working with swap to reduce the number of days that we actually buy so that it's more reflective of what can deliver an opinion from swap but have a reasonable amount of officer time applied to it so that's what we've been working towards and we have gone through a different process this year as Lisa said coming up with the ideas from the director it's taking that through the senior leadership team making sure that we've got the buy-in in each director it for those audits that are being delivered and obviously working with swap to check them against the risk register and check them against the council plan so I am really happy that this year we've got a collection of audits that actually the services have signed up to which gives us a better chance of getting them delivered and that we've now got the performance and resources board in place to review progress on the audits and to help unstick anything that's sort of got bottlenecked and again working with Lisa and having those conversations with her happy that halfway through the year we will then review where we are and whether anything needs to be amended because it is a life thing you know as we find problems or as things change then certainly I as the 151 officer would want to be able to suggest amendments to the audits that we're doing so that we make sure that we're always targeting most effectively because I think as I said before it's not about the low-hanging fruit it's not about auditing something that we know that we're going to get a good result on it's about actually auditing something that's going to give us a benefit because we think there's an issue there it's going to show up the issues and then we can use that information to address them thank you so yes now opening to questions yes indeed a counselor is thank you very much well first of all I'd like to commend you to having that very difficult conversation actually about the financial side of things and the number of audit days I mean obviously it can't be you know an easy one to have and also feet to hear that you've actually done an assessment on those days that wouldn't be utilized because of the resource and I think that's good financial management of actually they're not paying for something that we're effectively not going to use so that's really good to hear appreciate this what they've also joined us in that conversation I suppose the question is just to quantify it for in my mind it talks about swap of proposed to 25 reduction in fees and agreed to forego the 12-month notice period which is very kind of you to do so and to accept that the agreement obviously slowed us down from beginning so that's going to have an impact it further goes on to say on on actually being able to deliver a full plan within the time frame the 25 reduction 25 percent reduction in fees is that equating to a 25 percent reduction in the amount of audit days that were available or is that a straight reflection or is that more than the amount of like reduced audit days you see what I'm asking so was a reduction in audit days 25 percent of what we had originally contracted and therefore that's why you've reflected it or actually you've gone a bit further and reduced your fees as well further thank you it's what we like to consider it's a internal is a is a service and so we try to move away from sort of analyzing like pure days so we do offer like specialist services like IT there's three IT audits in this kind of fraud service it's another sort of specialist service that we offer and you know the value of those days you know be higher than you know sort of a more junior into an auditor so I think we need to be careful when we're talking about days that's only when we do publish our reports we do try not to sort of report in days but now you've asked the question I'll try and answer it best I can what I want to be able to do is say is at the end of the day you have to produce a plan that we can able to give an opinion so it's got to have that breadth it's got to reflect the strategic risks and the corporate priorities this is unitary authority with I think many many functions that potentially could be covered to give that breadth so it's not easy we're also internal just as a pension fund so we have to do pension fund audits and there are a growing number of follow-ups that were required to actually follow up as well so potentially is a lot of work but what's not going to change next year is my role as head of internal audit so that stays the same so in order to reduce fees by 25% actually we have to talk about days potentially have to reduce those further but because it's a service you know we'll be doing what we can to deliver a service I don't see any other questions any other things oh sorry cancer is again sorry that's very kind of you cancer rings if you go the floor is yours cancer rings but if no one else has got a question then I'll quickly ask the conformance with the public sector internal audit standards that was mentioned in the in here it says that every three years swap is subject to an external quality assessment of internal audit activity the last one of these is carried out in February 2020 which confirmed conformance with the public sector internal audit standards which is great news brilliant and you've done an annual self assessment can fit reconfirming ongoing compliance my question is has it not been carried out we're over a year beyond the three years has it not been carried out because there's been an external decision that you don't need to have one or is it just that they haven't organized it or you haven't organized it and when will we have that assurance because we're we're a year later from actually having that standards assured for us for swap five years but we've chosen to be assessed every three years in the past so more than you know that the actual requirement the reason it's gone a little bit over three years is because of this big review of the global standards that has taken place so next from next April there's going to a whole new set of global internal audit standards that we all have to follow so we've been waiting for those to be published so we can align our work you know we want to be sort of like one of the first possible in internal audit functions actually to be complying with the new global standards we've we've set that as an objective for ourselves so we've been waiting for those new standards to come out to see how we need to align our work hence as I said in the internal audit plan that we haven't got an updated charter because we're waiting for the internal audit Institute of internal auditors to produce a template that we can base you know our new charter on but the intention is to you know have an assessment in towards back end of this year the early part of next year and council Wilson thank you chair yeah just also echo the appreciation for the reduction in fees I think clearly the the financial situation of the council and the the high pressure that there is on all spend that was very I think I think quite important to get that moving in the right direction I think for me I'm also looking at the audit plan thinking about value for money and it does seem like there's a good selection of audits quite pleased to see procurement cards on there that always sends a little bit of a shutter down my spine where I see that because that's that's one of those places that if it's not very well controlled can be can be can be an interesting thing to look at and one question is around Treasury management because I know we've Elizabeth you previously talked about matters being an area and I just wonder what the perspective is on that whether that was considered in the plan or whether there was sort of any any particular reasons for not including it three management order and a reasonable assurance so that's the reason why it's not a nation's plan yes yes the floor is yours if you want I have a couple of questions but so Councillor Wilson again sorry just to follow up on that apologies so that does that mean if actually as of now we are much happier with the the Treasury management than we say were sort of six or nine months ago possibly one for Elizabeth thank you Casey Wilson and I think we're improving things in Treasury management I think that it depends on what the scope of the previous Treasury management audit was so certainly in terms of day-to-day Treasury management we're we're improving processes I think in tightening things up because I think my concern was more about our lack of strategy around Treasury management and the level that decisions were being taken at so those are the things that we are addressing currently but that might not have been what the the previous audit looked at um Councillor Reeves again um just my last question you'll be pleased to know um it's basically around the plan and the plan name so aim one which is on the strong financial footing which is our obviously key objective and our highest risk though this morning there's really good to see um echoing Councillor Wilson's comments about how it's all been scheduled and that there's enough coverage in there and we've talked previously about contract management as well and that being again another high risk within and here uh within the previous Q4 report that we saw there was a defer of the contract management audits to the 31st of December so the end of this year and that was all bundled in there were six I think there were six that were on the place contract management and reprecurement is scheduled here for first half so H1 scheduling and it's obviously talking about the contract management improvement processes waste contract and obviously for place and he mentioned it previously does that the date that we had previously which was the December to me isn't that falling into page two and is this going to I'm a little confused why this is H1 it is contract management and then they're still there was contract management for the 31st of December I just want to understand the scheduling and how that correlates to your date previously mentioned um so the audit that you're referring to that the deadline of December 24 and that relates to the contract management follow-up audit so one of the first audits we carried out and we became your internal auditors back in the first quarter of 22 was a contract management framework audit that is where we identified the high corporate risk and basically said that the council was lacking a contract management framework and we agreed a series of actions um due to lack of resources the implementation of those actions have been slower than hoped and currently the agreement um in place is that those actions will be put in place by December 2024 that is the follow-up order on page 55 corporate contract management follow-up um that is scheduled for quarter two and that corresponds to you know if they're all put if the actions are put in place in December 24 then in the second half of the year we'll better go in audit and provide assurance of implementation of those agreed actions and so the aim was to put the most important audits in the first half of the year but in relation to the corporate contract management follow-up it wasn't possible because of the time frames that have been agreed but we have put the place contract work into the first half of the year so thanks for the the comments i appreciate that actually as well that you've separated them out so there's the corporate the understanding is that there's the corporate contract management audit that you've done that's a follow-up that will be in h2 and but we'll still have the place one earlier which as you mentioned previously is the higher value contracts as well so you know bringing it forward into the first half and gives me more reassurance that actually we're looking at the really really key risks in uh in the audit um as well so thank you very much for that i appreciate that okay any further questions i'm looking around um no okay um well i'll just just i'd like to just reiterate what's been said already in fact um thank you very much i think um i think that um we i i was admittedly a bit worried that we wouldn't be able to do this um given all these things but it's wonderful that there's a we have a plan um and i'm actually just looking at the appendix a and and also bearing in mind the comments that we've had i i can't see anything that's material you know material that's obviously missing there it looks like that we are covering them i also do appreciate that the scheduling of them is is sort of front-ended um in terms of risk um and i also appreciate that there'll be this half year review as it were as to where we are i suppose it's uh one small question on that is that will this sub will this half year review be something that comes before us um as a committee right because all changes the internal audit panel are reported to this committee yes i thought i knew the answer to that but thank you very much so no thank you once again um so we have to vote on this and we have to decide if we are happy um as um as um lisa briar has said if we are happy that this year does indeed um provide a sufficient and appropriate audit plan to provide sufficient independent assurance against the key risks faced by us as an organization so um are we happy that this audit plan um does do that and are happy to approve this audit plan for 2024-25 agreed agreed all agreed thank you okay thank you very much right moving on uh to section uh to item six on the agenda so which is our risk management plan so we are here to note am i just writing we are here to note the uh the approach to risk management and also i think um also to note where we are in terms of what our key risks are but uh i'll say no more and give the floor to sleep roughly thank you very much chair so there's two aspects to this risk management report one looks at the process that we use to get our key risks to make sure the things we're talking about that feeding the internal audit plan are the right things and secondly the key strategic risks at the moment which we're taking of uh an approach now to demonstrate in terms of a scatter graph so officers and members can see both the impact and likelihood scores rather than just the overall metric rating which we think is of interest and just to emphasize that the key risks are those where if the controls fail they carry the most damaging impacts on the local authority as explaining the strategy what that looks like in terms of reputation finance legality that sort of thing what we've been doing differently now is overlapping somewhat with the quarterly assurance report in terms of the presentation of the risks so we're trying to drill down to specific detail and make them much more user-friendly in terms of the report whilst the detailed information retained on the risk register exists what we're doing here is headline stuff so officers or members can dig deeper if they need to in support of that and i mentioned this earlier i've been on regular contact with the director elt for their risks to make sure that they are the right ones that they are happy with the impact and likelihood scoring and that the summaries that we put forward are ones that are understood by everyone including myself so i don't think there's anything more to draw your attention to that the risk management strategy is overall very similar to last year's it's got the corporate plan on which reminds me so all the key risks now are tied into the corporate plan as well so if we look at this register and say what's everything to do with aim one we could draw that if we needed to so we've got that facility as as well um the training aspect which is mentioned in this report i've just done some this evening for that in the same aspect we run forward to officers as well uh so we're looking at making good progress i think um the information that's there i think is of good management use i think our processes are sound the addition of the corporate assurance board as another layer of assurance and governance to that process um let's leave it there and i'll take questions um thank you thank you um um counselor reeves um it's interesting because obviously risk people think of just like negative impacts there's also potential positive impacts as well um which is which is a good thing and one of those uh you're the key identified risk there is if we don't have a good risk management process in place and we don't have mitigations and what i want to do is commend you on actually as a member of the corporate ons and going through the qar as well and we've just to relay to you because i know you don't take part in it but hopefully you've heard that um the new scatter graph approach to the risk management and presenting it that way has been genuinely appreciated and actually seen as a great value it was even commented on our corporate ons meeting previously so to me you know the benefit is definitely being seen and you know if we can keep that going i think we're on a really good footing from a scrutiny perspective coming before this and also in the corporate ons as well so you know really not really a question but just as an opportunity to actually relay that to you personally you know and directly um we do appreciate the way that it's now been set up and there feels like a lot more transparency a lot more risk assessment and a lot more risk management and putting us in a better footing thank you again for those is what we're doing now is trying to make sure this stuff does some good for many years and some of the risks have not changed that dramatically in terms of their assessment now there are reasons for that the granularity we use is a four by four grid and whilst there's confidence levels built into that there's not necessarily enough room for maneuver but you'll see on one of the appendices the key strategic risk one we've got a target risk in process there and so what we expect to happen is by regular review of those risks we can move closer to that target much quicker because those targets have been set with a realistic idea of where we can get to in terms of our process they're not aspirational not pie in the sky they're based on the resources that we can realistically apply and where we think we can get to that being said there's always a level of uncertainty any risk approach so it may be that those aspirations have to be adapted if new information comes to hand if if things happen but that gives us a very clear direction of travel and thank you and council shop thank you chair i i think this is quite interesting actually the way it's been the way you've changed the emphasis of the report and it's it's actually quite useful what i think would be interesting would be would be for you to produce the key strategic risks chart over the color chart which shows exactly where they are in the in the risk schedule so that you've got it exactly mapped on there because you can see the most of them are obviously up in the top right hand side which is where you'd expect them to be but others are slightly over to the left or lower down interesting to see exactly where they sit which which color they sit within and see that that maps on but i think overall this is quite a good approach whereas before we had pages and pages of risks to run through and you couldn't really tell what was going on and get a good view of it you've got a very succinct view of where you think the the main risks are do you think though that there's anything that is there any stone that has been left unturned so far that may come up as a surprise risk if you like i don't think so um the process that i described a couple of questions beforehand with the management teams and indeed the directors should uncover anything like that to my view they've been fairly transparent in that there's always the thing we've discussed this at this family before about can we add any more granularity to this can we add uh um exactly uh because it's very difficult it's got to apply across the board otherwise it's not going to work so if you get two or three let's say insurance based risk is drawn there which i can granularize that's a word um to a great degree if the rest of the process doesn't follow there's very little merit in pursuing that so it's got to be a one size fits all approach so um there's nothing in terms of a risk exposure no black swans i think that the council is uh likely or even unlikely to account for the black swans in the future but i'm confident that the transparency and the meetings and it'd be my own understanding of this it goes a long way to giving real integrity and indeed bite to our risk management approach i see no hands up immediately oh sorry i i'm going to jump in myself cancer reeves just because i i just before you i saw you um just i've just got a couple of questions i suppose only one on process i really really like the um i'd say i really like the the approach it seems to be very good you mentioned something i just picked up though about the the four by four grid um and obviously you know look at the purpose as i understand it of these grid is to show things in a relative manner in terms of saying well this is a higher than that and this is higher than that um but i think you said that uh if i picked up that perhaps four by four might you know make it difficult to stratify between some of the ones that are maybe you know high and very high and exceptionally it might say um are you happy with the four by four or were you actually saying perhaps we should do something a bit more like five by five say yeah it's a proof of thought and i did research that whilst drawing the strategy i'm thinking well can we have what will this get acceptance like it probably would but then it's a case of where those strata lie so we would need to make a lot of thought to make sure that the relative position of our new let's say seven by seven matrix works well when we're looking at reputation risks compared to finance ones so that the impacts are consistent across the board there's nothing intrinsically wrong with four by four it avoids taking the middle ground for one thing um but at the same time when we look for more granularity it might be interesting as you say to have a few more at the top level and so we go high very high extreme catastrophic at that there's no point in making low slightly low a bit low you need to have some purpose to it so that's something we can certainly develop uh counselor for going forward i like that idea okay that's that's fine just just wanted to your suggestion on that's something to consider the next time mate or just consider for that at some point in the future okay um i won't go any further because lots of hands are up um council reeves name um i think i think there's been some really good points made about i know like obviously um council sharp was talking about is there ways to overlay things or to actually have this relate relate and then that got me thinking actually about with the key strategic risk scatter graph and the way it's presented it links back to what i mentioned earlier i asked about earlier which you answered which is did it take into account the audit feedback and therefore you know change the risk profiling from that and lisa mentioned that obviously they do a risk-based audit as well and you're looking at risks so you're saying obviously you allow for it in here can you give me an explanation on how swaps then how do you share it with them how frequently do you share it with them and and then lisa do you then look at this and actually take that into account when you come to your scheduling and your evaluation of of risks um are you looking at this key strategic risk graph as well yes in a progress report that we've seen tonight you see there was one schedule that had the strategic risks and that was and then i mapped audit coverage for 23 24 against it so yeah to us the strategic risk measures is an absolute key document yeah and also used it in planning um and the appendix that lists all the audits in the plan you can see from them what the strategic risk relates to to yeah definitely use it um council sharp did you want to okay um thank you chair um so yeah just i've actually got three points if i can go through them if that's all right so firstly on the um on the on the um on your sort of like your scatter chart and just curious as to the positioning of transformation um appreciate obviously it's um it's it's a big undertaking for the council um i guess slightly surprised that it was such a high risk and i wonder if you could just explain the rationale behind that well it should be uh three by three so it's not the highest risk there because there's a number of things in place and working so it's possible by thought it was changing the paper before i submitted them but it's not high risk it's it's medium high at the moment tonight i don't know if the report says differently but it should say um three by three on that particular one because there are things just going to the list underneath yes uh so the the program teams be recruited i won't read out all the things but at the moment we haven't done those projects we've got a structure in place to do them with governance associated project risk registers anything on there that's very high will find its way onto the risk register as well be that strategic or be that operational i should mention actually when we looked at this process the scatter graph for the strategic stuff the same thing exists for the operational risks as well it's a bit busier because there's more stuff on it but it's also quite informative to see how risks within place compares those with insurance compared to those within resources where those risks aren't strategic ones um it's possibly of interest only to myself it's interesting to see how those risks relate to each other from an operational level um sorry yeah question um well it was just the the effectively the assessment i think it may be 16 in the table and potentially yeah it should be nine by four twelve on the chart but i'm kind of going my thinking was well actually we've got a process in place to manage it so um i just think yeah it was irrespective of the slight difference thinking oh why is it that high uh it shouldn't be it should be three by three i'm not sure what's happened there yes the version i'm looking at has um yeah okay all right thank you um and then the second point was around climate change yes and the way the way you're describing it in the table um on page 42 is sort of focused on the um the the net zero target which is great and i just i guess i'm observing around the borough that there are kind of more immediate impacts of climate change possibly in terms of the flooding the rainfall the um you know the more more growth of plants requiring more maintenance and i'm kind of thinking well okay we've got a um a sort of like a 25-year plan for for net zero but is there a more immediate risk that we're not able to be more flexible to deal with the the kind of the short-term fluctuations which are you know potentially related sure yeah the the flood risk does feature the risk which is not being treated as a strategic matter it's an operational matter that falls within our andrew durrance uh area yeah i would need to check exactly what the rating is for that at the moment but i only spoke with andrew about it a week ago so it's something that that is conscious of when i spoke about climate change at the same time yeah to make sure that we're on the same page for that but flood risk does exist and our feedback separately as to how that looks uh at the moment and that gives them that that as an operational matter would necessarily be more immediate and short term yes okay thank you uh and then finally um and this is sort of related to what you've said around the cost of living crisis um on here around uh increased antisocial behavior and i just i've been sort of there have been a number of instances in in my ward recently where um the antisocial behavior has kind of extended to actual criminal damage and it seems to be increasing and therefore i just wonder where like crime levels would would sit in this right so that's something for me to take forward with the director and say that one of the things we're perhaps not looking at closely enough is some of the more um day-to-day aspects of constant living crisis yeah and perhaps you're looking at a too broad a matter or not but i we did not address that in there yeah so we can do that that might be something to look at is there's particularly trends in crime yeah um yeah okay thank you um thanks uh going back to the scheduling in the strategic risk which i think lisa you mentioned in the internal audit plan there is a column for strategic risk and i looked at that uh when i was looking at that in comparison to the strategic risk graph uh it there's this the the definition of strategic risk some of them aren't immediately obvious some of them are obvious where they fall under um within the strategic strategic risk graph so is there a way that we can or is is there an idea that we can try and match them up so we can see okay we're looking at the strategic risk where they fit and how high they are then we can quite easily see where they are scheduled within your plan so that then we can amalgamate the two together a little bit easier at the moment i'm trying to read through them increased demand for services as a strategic risk as an example and then i have to find well where does that fall under your chart so how do they you know how is that correlated so it's just a thought i'm wondering whether there's an opportunity to kind of relate them back to each other if you see what i mean you should i i wonder because the strategic is a live document as well it's not beyond the realms of possibility that things have moved on slightly since i did the plan so that might that might be a reason why some of them don't match up entirely um i haven't i haven't seen the risk register in in this form before and i'm sure it's entirely possible to to match the two up so i'd be happy to have a look looking around i don't see any other things but i have a couple of questions myself oh sorry yes thank you just one more point on uh counselor reeves question there not everything that we identify as a risk will be something that we can translate into an audit so for example um we're doing an audit looking at finance reporting this year but you know that's one aspect of what we do on the finances so even although we're seeing you know finances is the biggest risk that we've got on there we can't cover every aspect of that in internal audit work um and also it's supplemented by other things so you know we've got set for and at the moment doing a review of our finance processes so there's no point in saying right internal audit we need you to do a review of our finance processes because we're having that dealt with another way so you're absolutely right you know we should be able to see a correlation between what's on the risk register and what's an internal audit but just to sort of have that nuance that not everything that's that's on the risk register can be encompassed in them in an audit thank you um lovely i've just got a couple of questions um myself um one is just picking up um just obviously people were looking at the the scatter graph and versus the um the the the list that we have at the end of the report um and just a couple of sort of things that didn't quite match up um possibly might be answered by the same question um as part of our responsibility as a committee uh we have this sort of annual review of the approach we have sort of six monthly reviews of the uh of the detail i guess um in terms of the in terms of that um i while i really really appreciate and perhaps this isn't one of those six monthly reviews i don't know but while i really appreciate the high level i love i love high level um executive summary um it would be good being able to see some of the details so for example um a transformation might not be the best example but we have an overall i guess that's a net rating of 16 um and um but it'd be good to know what is the gross rating as it were before any existing controls what what are we actually relying on that we think gives us that assurance that actually we're not at that we're at a lower rating and and and also maybe additional further detail what do we think we need to do to get to our target rating i i'm sure i've seen this before and i know these exist um but can you just give assurance is this are we are we reviewing that now or is that something we'll review in the future or at some other point yeah this is the version of the risk register to bring to you there are other versions that exist this is the most um in our view comprehensive whilst not being too wordy um the long-standing members of the committee in its previous iterations would recall appendices that run to 90 or so pages which detail the risks for no other reason to say there they are look what we've done it doesn't help if we're happy with the process that we don't need to necessarily have 90 pages of risks to scrutinize that being said it's gonna be that difficult to put in if we're just going to concentrate to the strategic risks that would probably be a much that would be a much shorter document particularly concentrated on information that you just asked for just on that then i think um i mean my my own preference but my own preference would be that while i do appreciate the sort of the the very high level um thing i think for the for the top strategic risks it would be good for the purposes of our review to just be um just have sort of a little bit more it'd be lovely if it was an in an appendix um just just especially because just those key ones we just in terms of evaluating are we doing enough you know and is this you know are we doing enough now oh you know when we're looking to me when i'm looking at the risks i'm looking at what are we relying on what are we doing um are we happy that there is that that is enough and then if it's not enough okay in the future does that look credible as well that that would be how i would review it consider doing is rather than doing all the key risks is to look at the top six so anything that's got a score of eight or above we'll look at those in greater detail things that are below that we won't unless there's uh some reason we want to fix something out does that that sounds like a reasonable proposal will be yes okay okay that's lovely no that would be look like yes i think that was part of the suggestion of the introduction of the scatter graph was to push the focus to that top right hand corner so showing the risks relative to each other sort of gives you an idea of where we should be focusing and you can see kind of i think quite easily what um what we should be focusing on what we should be making sure we give the most attention to and again shortening the descriptions shortening the information that we're providing allows you to scan down the list i think you've already said allows you to scan down the list much more easily because i think when we were looking at pages and pages of information we were in the situation where we couldn't see the wood for the trees so by shortening that and making it more succinct um and by introducing the scatter graph i think it does draw the attention to where it should be and allows you to easily see what that is what we're doing in the in the qer report is um there's going to be the scatter graph in the body of the report the short succinct list of description of risk who owns it what the current mitigations are what the future mitigations are and then there will be a more fuller index attached to the back of the quarterly performance report so you'll have more detailed information there should you want to go down and refer to it but within the body of the report it'll be a much easier route that that's if it's reported elsewhere in the qar that sounds a good idea i mean i'm just almost i'm going to praise um lisa fryer here because i thought that it just to compare with um the the the audits as it were we had the executive summary and then the limited assurance things we have well let's give you a bit more detail on those so yes it looks like we're all reading and it looks like it's going to be done anyway um council wilson you were yeah thank you chair i just wanted to endorse the structure of this report makes it very uh digestible and it's almost like less reading time more thinking time so i really appreciate how how easy it is to actually just get get a picture of it and then actually think through things thank you that's the reason so to add to that a an idea is that is it possible for us to have a a scatter graph of the targets please so where you're targeting to be the reason for that is because it's if we look at finance we're looking at getting to a target eight what would be interesting is to see well exactly what makeup is that you know with likelihood and impact so are we looking at to reduce it as less likely um but with still a high impact that gives us a really good way of seeing how you're looking at it strategically as well on reducing the risk and on getting to the target because i find that really useful as we've talked about a lot i think here this scatter graph has really sort of revolutionized in some way the way that we can look at it and get a more strategic bigger picture of where you you're seeing things i'd love to see the same for your target because that will also inform us initially i thought about oh can we put them on top of each other but then you'll have lines going from one to another another day and it will look like the um london tube map uh rather than actually something that's still digestible so if we could have i know it's a bit more work but if we could have two separate graphs one now and one target please that would be great do you if it's possible sorry can i just sorry can i can i just i i must admit i'm not in favor of that i think that i i i i don't see what value add that would be but um but i i i don't i i don't know this this this is all about just the format and the look of look and feel of it really um but i just wonder if there are any other views about this in terms of the target yes yeah i think i think that um and again because the scatter graph is a is the multiplication of the two factors um i don't think this i don't think a scatter graph of that will tell you what it is you want to know because you were saying you want to know whether you think it's a lower impact or less like there but the time you multiply them up you won't know which ones which um so i'm not sure i i do understand that you want to know what we're thinking in terms of where we want to get to so maybe that's something that we look at in terms of when we're doing those ratings and we're doing the targets if it's not already included we can we can have a think about putting that in the bottom corner of the cell or something like that but i'm not sure scatter graph's going to give you that information sorry chancellor reed sorry chancellor sharp thank you i i just think this whole conversation we're in danger of going into a rabbit hole because it seems to me and whenever i've got involved in risk assessment i do quite a lot of it is there's there's some science to it but there's also some art to it and we could quite easily for example on the charts that we've we've got we could take a view that something was 25 less likely to happen or 50 more likely to happen and you'd end up with a graph that looked very different to what it does it doesn't mean that the one that we've got now is wrong and it doesn't mean the one that we've produced in a different way is wrong it's just we've taken a different view of the likelihood and risk value that we're dealing with and on all of those things we may be quantum's out anyway so i don't think it makes any difference it's useful to see these graphs as a perspective but it's not the answer to how risk is managed it's just one of the tools that we have so i think we just need to put it all in perspective properly thank you okay thank you um so we have to note this risk management report um i think that's all we have to do yes indeed so can we duly note this report yes lovely duly noted excellent thank you perfect so thank you steve thank you very much yes excellent right okay so uh nearly there so item seven and um this is the external the so the 2023 24 external audit plan and we are joined by peter barber who is from grant thornton i'm guessing yes who is from grant thornton and um so we are here to actually consider and approve this external audit plan um for the year for the both the council as a whole and also for the barkshire pension fund uh which we are also um this is something that rbwm administers now we have been um we have been given a an attachment haven't we to to review but um peter hello um peter would you like to give us a sort of like a sort of a high level summary of um of your perspective of the key points that you think we need to note in terms of our sort of indicative audit plan for 23 24. thank you chair uh good good evening committee so um yeah thank you for that introduction uh yes peter barber uh a director with grant thornton and i am uh taking over as the council's appointed auditor uh with effect from 22 20 i got the wrong year then 23 24 um my colleague beth bowers uh who uh unfortunately is unable to attend a day um is undertaking the same role at uh barkshire pension fund so um we are both very much looking forward to working with um the council and the pension fund going forward in terms of the the two plans if i start with the council plan so that begins um on page three of the supplementary pack that you refer to chair um and when i do actually go through the plan briefly i i will refer to the the numbering on the left hand uh margin as opposed to the the smaller numbers that appear in the in the documents themselves um but if we start with the the council plan just to to remind um members of the committee that our role is twofold it's an opinion on your financial statements and it's a value for money conclusion um if i start with the opinion um you will no doubt be aware um that the opinions for both 21 22 and 22 23 remain to be concluded um this plan is predicated and assumes that both those two audit periods will be subject to the sector-wide backstop um and this will in turn uh allow hopefully a more timely commencement and conclusion to the audit process going forward recognizing order is a retrospective exercise um in terms of the the deadlines for accounts uh the 23 24 financial statements deadline has been brought forward this year to the end of may um and uh we've been made aware by officers that there is a delay in those draft 23 24 accounts being issued due to a number of potential accounting issues that are requiring further investigation and we will just continue to liaise with officers to understand the impact of these issues on the timeliness of those accounts and any impact on our risk and audit approach but clearly if there are continued delays we would seek to be having further conversations with this committee um as those charged with governance now in terms of the approach that we adopt this this plan sets out that approach um and it is a substantive one um in in audits particularly in the commercial sector a lot of auditors will look to undertake um controls work looking at the financial systems and the controls that operate and walking those throughs and testing their effectiveness and if they get assurances over the effectiveness of those controls it reduces the substantive work through experience a substantive a purely substantive approach is adopted by our firm in the public sector your accounts are large i did earlier today look at the 22 23 version now i think it was over 150 pages and when we do come to undertake that work we will have to undertake all the procedures on all the disclosures and entries in all of those pages now we won't do the same amount of work on all the disclosures and as summarized on page 10 of the document you will see that when i do hopefully come to sign off the the accounts in a more timely manner we will work to what we call a materiality figure and we set a slightly higher materiality figure for the group than the single entity but they're pretty close given the quantum of spend um within the the group and the respective single entity you'll see it's just over five million pound for the group and five million pound exactly for the single entity council and that equates to approximately 1.5 percent of your draft 22 23 gross operating expenditure and what that means is that any entries in the primary statements within your draft set of accounts any entries above that five five and a bit million pound threshold will be subject to an extra degree of scrutiny and challenge more work will go in to gain assurance over the material accuracy of those disclosures and then we have further set out on the same page in the plan what we call our significant risks and these are the areas that take up the most time and require the greatest attention and you'll see in the plan that we have four of these areas um the the first one is management override of control and this really this is a a risk significant risk that will appear in every order irrespective of sector irrespective of risk it is about um those areas of the accounts subject to greatest judgment and estimation but it also focuses quite in quite detail on journals which should somebody wish to do so is is a really good way of moving monies um between cost centres accounts and dare i say financial years so there's lots of work that we do using digital tools to extract the ledger in totality look at the journals in totality risk assess them and target a sample to make sure that they are legitimate journals the other area that appears i would suspect in every single council that you come across is the very large figure at the top of your balance sheet which is your land of buildings submit to a large degree of estimation and judgment you use your own valuers we bring in our own values as well to challenge the judgments made by your valuers it's a very involved process the workload has increased exponentially to over the last 10 years um and um it's very involved for you and very involved from us but that's what the regulators want and that's what we do in terms of getting assurance over those numbers recognizing small changes um in assumptions can make some very large differences to the carrying value of those assets not all all councils have uh material investment properties but you do um and unlike the land of buildings they need to be valued every year um but it's a similar approach and we adopt a similar approach in terms of gaining assurance over those assets and we do over land and buildings recognizing they're generally valued in a different way often in yield and rental income and then the final one is in relation to the valuation of the net pension fund liability which is a large it but in many cases decreasing um liability at the bottom of your balance sheet in relation to um the pension fund um and uh once again the information for that is sourced from the actuary lots of judgment and estimation and an awful lot of work uh required for us to gain assurances given the numbers concerned now that would be a normal approach adopted at a council but there is an added complication that i do want to make you aware of um at the Royal Borough of Windsor and Maidenhead for 23-24 and that is the potential for us to do some further work around the opening balances given the proposed backstop for the prior years um i've not gone into any detail in the plan i've referred to it but i've not explained explicitly what we intend to do because at the moment we are waiting for that guidance um on what will be required the the financial reporting council and the nao are working together to issue that guidance um but that is um not materialized at the moment and it won't materialize until obviously um the backstop has been finalized and signed off which um will no doubt be delayed as a result of the the recent election announcement um so that's the opinion um the other area as i mentioned is value for money um and value for money means lots of things to lots of people but for us as public sector auditors it covers the guidance in the nao code you know code sets out three areas we look at financial sustainability and i know that's been mentioned on a number of occasions this evening budget setting monitoring reporting how you deliver that budget in here so we'll be very interested in 23-24 in the out term when it comes out but also planning into the medium term and how you're planning your resources to ensure that you remain sustainable into the medium term so we really do look in a lot of detail at how you set your medium term financial plan how you would have set your budget at full council in february 24 for 24-5 etc and we are aware that there are a number of particular challenges around financial sustainability at the council and the challenges in terms of um uh potential overspends on the adequacy of reserves as well as those um further points that have been referred to this evening that are being followed up ahead of the the final set of accounts being produced um i'm also aware that um uh the outgoing auditors in their most recent uh vfm report which i think covered 2021 um there was a um a weakness there identified around governance um and in particular the council's capacity to operate in a timely and effective way um clearly we do have regard to um the prior year auditors recognizing that is reflecting arrangements a few years ago but clearly that will be something that we want to to focus on as well importantly on the vfm front that work is already underway so there have already been a number of setup meetings document reviews and that will be supplemented very soon with interviews with key individuals to inform and trialing triangulate our findings so probably the only other thing to mention um and to bring to your attention um in terms of the council plan is the fee which is set out an indicative fee on page 30 of your papers um i suspect a significant increase in what the council have have been paying and will be paying um in the past and this reflects the increased fees that have resulted with effect from 23 24 as a result of the latest psaa contract round chair i'm minded to stop there on the council plan take any questions and then maybe move on to the the pension fund separately um thank you very much um peter barber thank you that was a very very useful overview and um before i go an open floor to questions actually you you've um you you've raised i think what what is my top top question actually and i can see it being talked about um at the very end of this uh of the report about the backstop um and i i appreciate there is uncertainty over the backstop and almost the work required that will if if we go with the backstop if this is how it if this is what happens uh what will need to be done over the opening balance sheet because i um especially given what we what we know about the audits that uh um the the the conclusion of the audits that are happening now i just wonder actually before i go any further if i could ask maybe one of the finance officers either elizabeth or or um julian as well if they or elizabeth do you want to say anything about about about this you know the fact that um about this plan from that perspective in terms of the transition from the audit that we're doing now um which is very very historic and the fact that we're almost hopefully going to be catching up and moving well closer to closer to up to date as it were sorry it was a big question i know but um deliberately vague but then it is i think the answer is going to be suitably vague as well i think as pete alluded to um we sort of need to wait to see what the requirements are um and and sort of play it accordingly i think that um a lot of the work that we are doing at the moment on the historical issues and the balance sheet accounts will put us in a much better position to go into that but then obviously that's different from grant thornton feeling assured that that's the right position so the work that we're doing will definitely help it and it'll make us more confident going into it but what it comes down to is what the requirements are and what grants want to need to do to get their assurance that the opening balances are correct before they go into this year's order okay um i'll in that case open this to to the floor for any questions from the relevant councillors i'll just see uh recognize council wilson um yes thank you chair um just got a few questions hopefully they should be fairly quick and the first one is on the group could you just confirm what that includes um because looking at it it looks like it includes afc and not talus i was curious about whether property company might appear here or not um secondly pete you mentioned the accounts are large at 150 pages i just wonder given that we're a fairly small borough is all of that actually necessary or could we actually cut some of that down if we have kind of like a minimum um approach to the reporting um and then finding on materiality um actually let me come back to that if you just pick up those two that'd be great um peter do you have any uh any comments on those um so yeah through you chair if i may thank you so um let me just bring up the so on page 17 of the plan uh in relation to the question on the group um that is um based on our initial planning and um a initial discussion with deloitte as the outgoing auditors in terms of the the impact that those um those components have on the group clearly in the absence of the 23 24 accounts there are some assumptions there we've also triangulated that with the prior 22 23 accounts that are available um but clearly this would be revisited once we have the numbers within the 23 24 accounts um in terms of the observation about the the size of the the accounts um i have i have one audit where it's over 250 pages um group accounts by definition make it significantly larger um but it is absolutely true that there is lots of scope in my view to reduce the the size and detail within council accounts um the international auditing standard one is one is very explicit in this regard and i'm just trying to remember the quote now which goes along the lines of um the accounts must should not obscure the reader's interpretation of the financial information by including non-material non-relevant information within those accounts um i i didn't get that right but i'm hoping you get the gist which is in my view you don't really need notes to the primary statements if the primary statement disclosure is not material and i did mention materiality being five million now clearly if it's not material in one year and it does become material in the next year you don't want to be taking notes in and taking notes out each year so if you're comfortable that it's not going to be material for the foreseeable future you don't need a note you also don't need accounting policies for non-material disclosures within the primary statements there is a lot of councils that have it of including everything within the sit for code irrespective of the size within the accounts when challenged they often say well they want it for completeness and to provide further supplementary information for the reader but i think audiences will be getting increasingly critical of that approach given the the is not the is one reference that i've made earlier um i think that there was a third question it was on materiality was it but um yes um but he didn't quite ask i'm sorry of course he did yeah yeah you're absolutely right to anticipate it so sorry councillor wilson again yes thank you sorry i didn't want to run too many questions together so on materiality um you've obviously assessed materiality on kind of gross numbers and i guess i'm thinking of the perspective of the net position of the council which is obviously a very finely balanced budget and a small number a small amount of reserves and i just wonder kind of especially i guess them at the end of both the materiality and the level of trivial whether something like 245k genuinely is trivial when um you know if we're talking about looking at sort of a a um a few million pounds single figure million pounds of a net result over the course of the year so i wonder if that's just been set a little bit too high comment on that through you chair if i may um yet yes um the i think that the problem is that if it was set any lower the audit would never get done um it would just involve such large sample sizes and detailed testing that it would just become completely unwieldy there is a well recognized view within the sector that the materiality will be invariably in most industries based on spend gross spend occasionally if income is a lot more than spend it will be based on income but that predominantly it is ironically one of the areas that isn't is the pension fund that i'll come on to in a minute um which is based on the investments held but um and that the range of that materiality calculation should be between 0.5 and 2 and what we do is we make a judgment about how long far along that line it should be clearer the greater the risk within the the audited body the lower that should be closer to the 0.5 which means you end up testing a lot more because you have a lower threshold um but that is the that's industry-wide so if you consider a commercial organization down the road making widget where um there i say there might be some incentive to overstate its assets so we can get a loan from the bank or get a return to shareholders or um it wants to make a a greater profit so that those on performance related pay get it there is an a greater inherent risk within certain sectors than others not to say there isn't a risk of misreporting deliberate or otherwise within the public sector but the public sector tends to live further along that that that range um i have some audits there at two percent my lowest one is at one point two percent i am comfortable at one point five percent based on what i've uh the planning i've done at the moment is appropriate um but it will absolutely be revisited at the post statement stage again once we get the draft accounts um and then the triviality level the triviality level is five percent of that materiality figure because it is deemed to be sufficiently low to cover the risk of aggregated error that takes you in totality above materiality i think that's understood um council wilson again yeah thank you for that explanation that's very helpful and so just finally coming back to my first question once um the property company how is that included or not in the um the group now um i'm i'm struggling to recall this one if i'm honest um counselor wilson if i can can i take that one away if i may please and come back to you on that one um yes certainly i'm sorry oh no just just uh just um i just note that um the the executive director of the rules is uh elizabeth ricketts um might have something to say on that it's minor chair and we will talk to branch on to the beta but the the property company is a relatively small entity it falls below the materiality threshold and they have a separate audit can i just i don't see any more hands up just at the moment but um before we move to the pension one uh well there may be further questions um this is possibly a question for the officers actually um just notwithstanding what um the um mr barber has said about the um almost uh superfluous immaterial disclosures as it were um where do i mean and and also you know being where we don't want to do any more than we need to do um what is our view on our position in that regard are we do you think we are reasonably balanced uh or disclosing everything and maybe we have a scope to reduce what we disclose um to to only the material things but i've got strong views on this and there's clearly work we can do to reduce the accounts and it's often you know there's there's a large narrative element to accounts it's often in the art of how you draft that do you draft it succinctly or do you do you waffle and we need to do it succinctly into the point um absolutely we need to be confident enough to say that these these notes are not material i think i think in fairness to uh many accountants they they're risk averse aren't they i think if i stick everything in in the accounts the auditors are not going to pull me up on that and then you know i'm sure ground form to not you know to have very advanced thinking on this but there are auditors around who will get the checklist out and say oh you haven't done this jump in that but we should be confident ourselves to say yes this is not material and there is work to be done obviously at the moment we don't have a chief accountant so that's the difficult we have is is get the capacity to do that piece of work um so we're sort of lurching from one year to the next where we're just saying well this is what we had last year let's okay but now i think both me and elizabeth of that view um what pete said is fantastic because we absolutely agree about and actually in the long run it will reduce our own workload and make the accounts a more you know efficient process um so yeah it's definitely on our list um thank thank you um i i'm i'm seeing lots of nods in the room that think oh yes this is a win-win all round and um peter it's it's good to hear that um yes that there is that sort of focus on material things and um you know that there's a potential for less for you to do less for us to do is it potentially so long as we have the the the work we can we have the work done that can get us to that stage which is obviously the issue um i'm looking around and i'm not seeing any further questions from the room okay um in that case can we move um i i i do you want to talk maybe now about the pension fund uh the pension fund accounts um peter do you want to give it like a sort of a high level overview obviously we don't need to report repeat the same things but is there anything points that you'd like to make about the pension fund accounts and the audit plan for that thank you chair yes so the the pension fund um as i said that's uh that's my colleagues beth bowers uh who is the appointed auditor here so um i'm feeding this back really on her behalf um so it does it does it starts on page 41 of the supplementary pack similar format to the council but just to be very clear here the responsibilities in the pension fund are limited to the the opinion only we do not issue a value for money uh conclusion in relation to the pension fund um and within this pension fund plan the significant risks um the first two um uh are the the default risk that you would expect to see in any local government pension split scheme um it's management override of controls again that um i referred to earlier in the journals um there's a particular focus on on the the most hard to value investments because obviously within the fund account um there are a whole range of investments some of which are much much easier to value than others and there's as a result of their their complexity and how easy it is to arrive at a carrying value a fair value of those asset those investments at year end they are categorized as either level one level two or level three level three being the the most difficult to value um and therefore a lot of work goes into level three investment valuation um work um to gain assurance that those are accurately disclosed um the third risk um that's been picked out in relation to marks a pension fund is the valuation of this longevity insurance contract um that you have um uh within that investment um uh disclosures um clearly we don't come across these in many pension funds um and they are complexed um and my understanding is that beth has brought this to specifically out as a separate risk because it is something that we will want to be undertaking additional procedures on and further challenging and being skeptical of to ensure that we're absolutely confident that it's valued correctly it is interesting in in in the way that the the pension fund is set up because the fund account is is you'd have what the equivalent of the ine account when you've got all your income coming in your pension contributions employer employee transfers in return on investments all coming in as income and then you've got all your outflows which is your pensions payable and your transfers out etc um but then on the fund account you've got then your assets um but you don't have the liabilities that sit um at the bottom that you would think it logically would sit at the bottom of those pension fund primary statements what you do do is the pension funds report that in a note to the accounts so there is further work that is undertaken on that liability that gross liability which for the majority of pension funds is in excess of the total of those investments so there is work that's done on that liability as well um and in terms of the materiality um as i alluded to when introducing the the the council plan um we use one percent of materiality here but we use one percent of the investments held uh not the liabilities the gross liabilities but the gross investments um we don't base it on the um uh money's coming in in a year or money's going out because if we did it would be a lot lot smaller and it would make it almost impossible to get assurance within that threshold over the carrying value of your investments um and then once again in terms of the fees um these are set out on page 59 and once again i suspect are um significantly more than prior years and once again reflect the scale fees uh once again share happy to take any questions um thank you thank you peter um well let's just hope i have a couple of questions myself but i'll hold my tongue um are there any other questions are there any questions from the room uh no one's jumping so i'll i'll throw a couple of questions myself so um can i just um i mean just just let's start with the liability first of all so i presume am i right that um i i suppose my my background in the corporate world as it were are we looking at uh essentially like a sort of an is 19 um approach um rather than like a sort of a full full-blown valuation that you know like it's like a full triennial um valuation here is is can you just is just this just for my knowledge just just to just check yeah so so um i don't claim to have looked at the the barkshire pension fund accounts but i have audited a number of local pension schemes over over the years um there are different options that are available under the code for how they present them so there is an ability pension funds are allowed to put the liability alongside the investments to give the net position on the primary statement only one pension fund does that nationally almost every other one goes for option b which is that they have the their assets front top middle in the primary statement and they have hidden somewhere in the notes um the the gross liability um and it is absolutely the is 19 disclosures it's actually called an is is 26 disclosure in the notes but it's basically the aggregate of all the is 19s that appear in all the admitted bodies and the administering body um so um that is calculated every year by one of three actuaries national actuaries nationally they will do triangle reviews and they will do uh top-up work uh looking at movements in the intervening years to arrive at that liability calculation thank you okay um just on the um on the investments then on the fund um so um the the i presume in terms of the um this this longevity swap or the long this the or the insurance contract rather um i mean this has been you've pulled that out as a specific as a specific risk can i just check something you said earlier is this is this unusual is this unusual as it were i i chair i i haven't seen one of these on one of my pension funds before um but it doesn't mean that it's it's not used in a number of places um i'm just looking at the plan now and i'm looking at page 49 of the papers um the narrative for the and the in the second column and the reasons for the risk identification um it's it's clearly large uh it may be it may well be that others do but they're not it's not of a material nature um and it talks here about um you know how it sort of hedges against the the risk of people living longer than they anticipate um and the the sensitivity um of some of the assumptions in there to resulting in some potential large movements so um i mean it's referring here isn't it to 138 million so it's not it seems to be to be you know four times materiality and something that i suspect that beth is particularly keen to get assurance over in year one and i suspect if it's uh if it's a if it's if it's uh if we're satisfied after year one then clearly that can be reflected going forward in what work is required in future years okay no that makes sense um just oh just one more question as well i think of it and then um i'll open the floor again um and just on that same page just um similar question well with regard to these level three investments could just to give an idea of what a level three investment is i mean are we talking illiquid uh things like sort of private equity investments is that is that what we mean by level three uh just to just to give idea i mean i guess you know if you've got quoted stocks as it were that must be surely you know unless it's you know we're talking about like 100 of the stock that's easy to invest you know because it's quoted but is is that what you mean something that is really illiquid and judgmental yeah and we see lots of them so it seems like you can come across things like pooled investment vehicles derivatives can often be a really difficult to get a clear valuation on but you also get some really bizarre things in some pension funds like some of them will hold wine others will hold valuable paintings some will have housing stock it it's those where clearly if you've got you know a quoted share then a level one investment you can have hundreds of million pounds worth of them and it's you know exactly how much they're worth every single day you can just look it up and it's there if you've got a housing stock you know what is what is that worth a date they're not valued every single day you know what is that wine what is that picture worth what is what is a pulled investment vehicle worth when it may be made up of a whole raft of companies and shares of company percentage holdings and companies that that have different year ends etc so it requires lots of assessment about movements in the intervening period and is is where the focus is thank you right i've i've i've answered all my questions and taken up enough time already um counselor wilson thank you chair um so this is the first time i've actually focused on the pension fund accounts and i'm i guess i'm very curious about the um these two risks mentioned on page 49 that the level three investments we're talking so you're referring to illiquid investments and possibly things like wine and and sort of property and i guess what property is fairly standard um but but illiquid that are hard to value and then also this this longevity hedge which by the description of it i would think would likely end up as an asset so i'm curious that it's currently a 138 million liability um do we do does anybody have any sense of the history of these these items as in when the investments were taken out and how long they've been around and i guess the same for the longevity hedge when was that taken out because this seems to be curious to say the least is that a question about the audit i mean is this possibly more a question for the pension scheme i would have thought yes possibly sorry unless i mean julian i can see you looking up would you like to give a high-level answer i'm not sure if she's online but if you joe you if joe's online she said she'd happen to speak here she is simple magic hello good afternoon um good evening even um uh joe thistlewood uh head of pension fund um been appointed since the 22nd of april so don't have a lot of history but can give a little bit of background if that helps um through you chair um the longevity insurance is actually unique in the lgps i've given to understand it was taken out in 2009 i believe um to hedge against improvements in longevity of pensioners which were anticipated at the time and the anticipation was pensioners were living longer so uh effectively um our liabilities were going to be payable for longer so a hedge was taken out against all existing pensioners at that time um based on the fact that we may be paying out longer pensions and hence having bigger liabilities um at the moment it should be an asset you're absolutely correct but at the moment it is um a liability because the improvements in longevity have not materialized as quickly as was anticipated in the when the insurance was taken out so actually we it was a very good idea at the time but then people didn't live as longer as anticipated at the time so that's the reason why it's there um we have uh officers and the actuaries barnard waddingham have spoken with beth and colleagues from grant thornton about this and a lot of detailed work is being undertaken at this time um so hopefully that gives a little bit more background but um if you want to take it outside the meeting councillors i'm happy to have a quick conversation with you if that helps um in terms of the level three investments these are long-standing um investments that have been taken out over a number of years in private debt private equity funds uh real estate and some infrastructure those are subject to various different levels of external valuation not on publicly listed exchanges or or um or indexes so it is very subjective similar to investment properties in the council's perspective um so they are long-standing investments part of a bit balanced investment strategy for the pension fund um again happy to take that outside the meeting if anybody wants to discuss this further and thank you chair for letting me speak thank you joe uh for i didn't realize you were there so thank you uh for being there and answering that question um are there any further questions on um on the audit plan i'm i'm seeing no um in this case now we need to approve um we need to consider and approve the external audit plan for both the um financial year for the council what for the 2023 financial year for the council um and also for the um for the barkshire or pension plan sorry the barkshire pension fund have i got that right yes um let's just take that together if we're okay are we happy as accounts are we happy as a committee to approve this plan i see everyone agreeing yes approved excellent um thank thank you peter thank you for doing that thank you for the uh and uh yes we look forward to working with you and also thank you joe for being there i didn't realize you were there so thank you for answering that question um and yes brilliant okay so the final item um on the agenda is just simply the work program um for i'm sorry my mouse isn't working the work program for um looking forward so we have a few things we are looking at on the 9th of september um and i think the um you know well there's a couple of other things do we have any comments or questions on the work program i see no comments okay uh we we only need to consider this we only need to note it duly noted in that case um thank you everyone thank you for attending and I will declare the meeting closed.